CHENNAI, INDIA - (July 18, 2003) On July 2, 2003, the U.S. Trade and Development Agency (USTDA) awarded a $300,000 grant to Tamil Nadu Urban Infrastructure Financial Services Ltd. (TNUIFSL) to fund a technical assistance program on improving TNUIFSL's capacity to provide sub-sovereign financing for water and sanitation infrastructure projects in the State of Tamil Nadu in India. Mr. Richard D. Haynes, Consul General for South India, signed an agreement conferring the grant on behalf of the U.S. Government. Dr. Krishnaswamy Rajivan, Managing Director, signed on behalf of TNUIFSL.

The State of Tamil Nadu is at the forefront in developing countries in the creation of funding mechanisms for municipal infrastructure. Already, Tamil Nadu has demonstrated its leadership through its first bond issuance, as well as the creation of the Tamil Nadu Urban Development Fund and the Tamil Nadu Water and Sanitation Pooled Fund (TNUDF/TNWSPF). If these funds are successful, they will constitute a positive incentive for municipal infrastructure planners in other countries to develop sub-sovereign funding mechanisms.

The USTDA-funded technical assistance will advise TNUDF/TNWSPF on the development of a system to service bonds, as well as potential credit enhancement strategies to improve the creditworthiness and marketability of their issues. In addition, the technical assistance will provide recommendations on the establishment of more effective systems for assessing and improving the creditworthiness of municipalities and authorities.

The U.S. Trade and Development Agency advances economic development and U.S. commercial interests in developing and middle-income countries. The agency funds various forms of technical assistance, feasibility studies, training, orientation visits and business workshops that support the development of a modern infrastructure and a fair and open trading environment. USTDA's strategic use of foreign assistance funds to support sound investment policy and decision-making in host countries creates an enabling environment for trade, investment and sustainable economic development. In carrying out its mission, USTDA gives emphasis to economic sectors that may benefit from U.S. exports of goods and services.

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